Dear Editor,
Mr Lincoln Lewis in a letter to the editor carried in KN and SN (‘The administration must use the Jagdeo government’s performance as an example of what not to be’) of Sunday, January 24, in referring to the announced intended closure of Wales sugar estate, presented again his views that our PPP/C administration of 1992 to 2015, in our reworking of our bauxite sector, was inhumane and violated workers’ rights enshrined in various laws including the Guyana Constitution .
The facts tell a different story. I have challenged Mr Lewis’s views before; please allow me to refresh the memories of some and to inform others for the first time.
We were humane; we respected the rights of workers and were concerned about the future prospects for the workers and the communities, Guyanese all. President Jagdeo and members of the government met with the officers of the unions and workers from time to time, in Georgetown, in Linden and in Everton and Kwakwani. I attended and spoke at a number of annual seminars held by Messrs Lewis and Kim Kissoon (Chairman of Linmine Board) with the theme, ‘Where to, Bauxite?’ Everyone was aware that there were changes coming.
Lincoln refers to, “The arbitrary decision of the government to shut down Linmine and Bermine …” The decision was not arbitrary and there was no break in bauxite operations. Specifically, in the case of Linmine the PPP/C met an agreement between the outgoing PNC administration and the group of supporting countries and institutions which required that the international manager, Minproc, funded by the supporting group, be allowed two years to manage Linmine in their best judgment, then they would pronounce whether Linmine could be made profitable or not. If so Linmine was to be sold and if not it was to be shut down forthwith.
In 1994 Minproc proclaimed the latter; it could not see profitability for Linmine, but we (PPP/C) did not proceed to shut down Linmine. We could not be and were not inhumane to fellow Guyanese working in bauxite. We had to reconfigure the operations whilst arranging to satisfy all the benefits of the workers. The companies had to be reorganized to match the new (reduced) prospects for sales, taking all opportunities for improving productivity and hence for lowering costs.
Over the many preceding years of insufficient money in Linmine, the payments to the workers saving scheme, GRA personal income tax, NIS, and the company pension scheme were in arrears and needed to be reconciled with the various agencies. It required more than $2.5 billion and two years to satisfy all of these.
In the case of Bermine, it was completely run down. As things turned out, Alcoa bought out Reynolds inheriting the joint GOG/Reynolds operation at Aroaima. Alcoa informed the government that it had no need for the Aroaima operation, but they were willing to hand ABC/AMC to the government for US$1, along with conditions which essentially implied that GOG would keep the operations going for another two years. Again we reorganized to minimize costs and losses/subsidies and meeting all that was required for workers. Bermine was merged into ABC/AMC which was in better condition with better prospects.
In time, as we hoped, the two reorganized operations attracted credible interests and were privatized. In such circumstances the better approach is to end the existing company and start a new company in a new book. Termination benefits had to be and were paid to everyone and a good number of the 3000 so terminated were rehired the following day. Our PPP/C administration was as humane and as generous as it could be.
Mr Lewis criticizes again a number of our decisions/judgments at the time:
(i) Breaking up the savings scheme and pension plan. We decided to end the savings scheme and the pension scheme ‒ many workers wanted their monies for various reasons. Also, the cost of maintaining the pension scheme to the passing of the last member would eat up a great part of the scheme particularly when account is taken of the fact that there was an average inflation of about 100 between when money was put into the scheme and when administration costs had to be paid.
As for the accusation that GOG had no right to hand over the workers’ monies to others. We said, “Go to the workers. We will hand the money to the workers, and then they would invest themselves directly in any way/fund as they may be persuaded”.
(ii) Concerning the eventual privatization of the bauxite operations, we maintained/subsidised them through a number of invitations to privatize, until there were in our judgment, credible offers. Thus, recall the core operations in the Linden area were privatized firstly to OGML/ Cambior and when they collapsed we accepted the only offer OGML/Cambior were willing to accept, that of Bosai (the operations would have been abruptly closed otherwise). In the Berbice River we accepted the offer of Rusal. Today in a very difficult world trade situation, Bosai and Rusal are continuing core operations.
(iii) With respect to the alternative offer for Bermine we could have been wrong, but taking account of the condition of the plant, the bauxite/alumina/aluminium as well as the non-metallurgical businesses, we did not think that that proposal was credible. As I recall Mr Lewis’s proposals were not well received by a number of workers at a meeting he held in Everton.
It is certainly not true that we (PPP/C) did not look to develop alternatives for bauxite communities. We worked with EU/Sysmins for a third multilateral intervention, LEAP, proposing and progressing initially a programme of some €25 million which included much needed physical infrastructure (upgraded Linden- Ituni- Kwakwani road and Millie’s Hideout to Wiruni on the Berbice River). In later reviews within the EU, LEAP was downsized to keep focus on a people-changing programme. Separate funding would have to be sought later for infrastructure and other projects as they became evident.
Mr Winston Brassington and Mr Horace James worked assiduously to put and make non-core assets available and attractive for new profitable ventures.
The PPP/C administration completed the government take-up and provisioning for all non-core social services which the bauxite operations were no longer carrying.
We of the PPP/C maintain in all clear conscience that we have been taking equitable and appropriate (not identical) positions on bauxite and sugar, and we have endured criticisms from both sides. For example, there is the criticism that when OGML/Cambior had suspended the operations in Linden for two months, we provided basic pay to every employee requiring only that they, from sweeper to manager, spend a certain number of hours each week at computer classes aimed at their level. We were pointing African bauxite workers to the digital future but in our plans for sugar were seeking to consign Indian Guyanese to cutting cane.
We of the PPP/C expect no less care and concern of the present government as they address the difficulties of sugar.
Yours faithfully,
Samuel A Hinds
Former Prime Minister and President
